Does Pool want to be a framework for commercialising data transactions, so that data owners can get the value of their data?
This is right. In essence we are layer 1 for the data unions themselves, providing them with all the tools they need to be successful. In return Pool takes a cut of that revenue to ensure more data union growth and the upkeep and development of the framework.
There are also many other data unions in the ecosystem who we are currently talking to and they are aware of our proposition and would like to transfer to Pool once they can view our stack and the features we offer.
What stage is Pool at?
We now have a brand, a core team of more than a dozen employees, seed funding and we are well into product development. You can view our roadmap here: https://pooldata.io/product-roadmap/
In total, the core team brings together more than 12 years of direct experience on data union development, including co-creating a v1 framework, and helping to build and kick-start various data unions to date including Swash. We’ve started Pool to focus on DUs entirely, now that the market conditions are optimal.
We have a holistic plan for scaling from the buyers’ side and the DU operators’ (DUO) side and hope to raise another $20m+ in the next two quarters to enable this vision. We expect to release our v1 Marketplace by Q2 2022.
Where do you envisage the growth of new data unions coming from? Will it be new data unions, or companies creating their own data unions from existing user bases, or something else?
Initially, Pool expects most growth of the general ecosystem to come from new data unions (DUs) helping people to monetise their data. The reasons for this are multifarious:
1. In our team’s two-year enterprise outreach experience across various industry verticals (eg music and mobile communications), we’ve found enterprises are too slow to respond to the challenge of the new data paradigm.
- Departments – legal, marketing, data science, innovation etc – are often not aligned
- The ultimate revenue streams generated by such activities are not large enough to incentivise establishing company-wide change
- Regulatory evolution has not been clear (until now)
- When applicable, selling raw data streams can be viewed internally as a threat to that platform’s advertising delivery model
- Siloing data is instinctive; monetising it is not.
2. Data unions have natural product advantages over enterprise-led models. Data products formed of streams from multiple outlets are far more valuable than single company outputs, eg a data union made up of a member’s Spotify, Audible and iTunes data creates far more value than only, say, Spotify selling permissioned streams from members who explicitly consent to third-party data sales.
How does Pool solve the data pricing problem on its marketplace?
Firstly, everything is priced in USD. That helps a lot, especially compared to other crypto data market solutions. Secondly, the DUs themselves fix the price. So for the time being it’s easy enough for DUs to price their products competitively. Finally on this – and this is the short version here – we work with the buyers to really assess and set prices that again are competitive. CPM or consumers per mille (thousand) is also a standardised way of pricing data sets.
A publisher’s ability to provide quality free content is based on an exchange (attaining customer consent, using their onsite behaviours to then monetise it). How does a data union impact this publishing model?
Data unions (and more so the enabling EU legislation) will affect those whose revenue model is significantly dependent on either brokering personal data to third parties or creating third-party analytics solutions based on their first-party data. However, the number of those companies/platforms is actually very small. (We wouldn’t count FB and Google as publishers in the traditional sense.) For many other businesses, there will be minimal downsides along with significant ecosystem upsides over the medium to long term. Of course, porting data to a data union doesn’t in and of itself remove that data from the original platform. It just moves a copy of that information into an organisation that can also derive value from it, but this time on behalf of the data creator.
With regards to Facebook, Google, Amazon or other walled gardens – does a data union impact those organisations, and if so, in what way?
When draft provisions of the Digital Markets Act come into law, ie when realtime data portability from APIs is enacted on gatekeepers, then it is sort of game over for Google’s data silos when you combine this with a data union.
We believe that we could create between five and ten separate DUs from Google’s output alone.
Facebook is a special case largely because the data structures are so unique and also so integrated in a co-social way with other users/data creators. It’s not immediately obvious how DUs will be able to simply broker raw FB data in its entirety but there are specialised DU innovators we have been talking with who believe they are ready for just this challenge.
Can you give more details on the payment mechanism?
The payment mechanism is pretty simple. Buyers – analytics companies, enterprises AI/ML, hedge funds etc – pay for the data product (a realtime subscription or static historical data) through normal banking channels. Once transferred, and using open banking facilities, this is converted into an equivalent amount of USD-denominated stable coin in the backend. That sum is then automatically sent to an Ethereum smart contract. This smart contract is key as it governs the membership of the DU and also the other parties to whom money must be disbursed including the DU operators and the Pool Foundation.
Why a stable coin? Because we want to ensure pricing and reward consistency for all parties. Why crypto? The answer is that no fiat system can handle these levels of micro-payments to this number of people, so seamlessly, and at such incredibly low cost. Which partly explains why DUs have only just gotten off the ground. This is a technically led innovation.
Also, digital, programmable money is the future of payments. Why build for the past?
Will any part of the Pool infrastructure be centralised?
Yes. Web3 can’t yet handle decentralised p2p messaging, for example. Other parts of the stack will also be centralised (ie the analytics solution). Pool doesn’t believe in technical decentralisation above operative functionality. Other projects we have all worked at have really suffered because of ideological purity in that regard and in doing so, wasted tons of capital, time and even now have yet to create functioning, let alone well adopted, products. When suitable Web3 technologies are released, we will be the first to adopt them. We do believe that our consumer-facing product (our data wallet) can be decentralised from day one and that will help guarantee users are as in control as possible.
Where is your data stored?
So for the aggregated (and pseudonymised) data, the DU itself holds that information and serves it up as a static file (or as a realtime API) on Pool’s marketplace. Pool in that regard doesn’t store any data. When we release our data wallet, that will have a personal data vault (PDV) added, which will help store the data that users create from a DU and basically copy and paste that realtime information into the PDV. That solution will be non-custodial (from Pool’s perspective) and will be controlled and operated by the user using the same public/private key as the wallet.
Token governance will kick in after 20-30 months. Which type of decisions will governance have a say in?
We haven’t fully decided that as yet. DUOs will at first take decisions that directly mostly affect them, eg new feature changes on the marketplace, data protocols etc. That will rapidly move to fiscal decisions for the platform, like how the analytics revenue should be divided up. But wherever we start won’t be where we end up. The idea would be to progressively decentralise the governance of the whole platform to its stakeholders.